2012 cira compilation and review overview …€¦ · 2012 cira compilation and review overview for...

© 2012 CCH. All Rights Reserved. RES-KCO

2012 CIRA COMPILATION AND REVIEW OVERVIEW FOR KNOWLEDGE COACH USERS

PURPOSE

This document is published for the purpose of communicating, to users of the toolset, updates and enhancements included in the current version. This document is not, and should

not be used as, a program to update the engagement documentation of an engagement started in a previous version of this product.

WORKPAPER UPDATES AND ROLL FORWARD NOTES

General Roll Forward Note: You must be the current editor of all Knowledge Coach workpapers to update to the latest content, and you must be the current editor upon opening the updated workpaper for the

first time to ensure you see the updated workpaper.

The 2012 Knowledge-Based™ Audits, Compilations, and Reviews of Common Interest Realty Associations is current through Statement on Standards for Accounting and Review

Services No. 20 (SSARS-20), Revised Applicability of Statements on Standards for Accounting and Review Services; AR Section 9080, Compilation of Financial Statements—

Accounting and Review Services Interpretations of Section 80; and AR Section 9090, Review of Financial Statements—Accounting and Review Services Interpretations of

Section 90.

Compilation Programs (CMPs):

To enhance usability and increase efficiency, CMP-101, CMP-801, and CMP-802 were combined to create a single comprehensive CMP-101 Overall Compilation

Program and the previous CMP-801 and CMP-802 were deleted from the toolset.

Compilation programs have been updated throughout to indicate that “notations have been made where specific requirements apply to engagements involving compilation

of a specified element, account, or item of a financial statement, compilation of pro forma financial information, or compilation of personal financial statements.”

Specific Compilation Program Enhancements:

Type of

Change

Description of Change Location Based on

Standard

Y/N

Standard

Reference

Roll Forward and Update Content Considerations

CMP-101 Overall Compilation Program

New Contact the client to determine when information

and client personnel will be available so that staff

can begin compilation procedures."

Procedure steps N N/A

New Review prior year’s financial statements,

workpapers, budget, and budget/actual

comparisons to evaluate the time necessary to

complete the engagement and:

a. Identify any specific known matters, affecting

the current or prior period, that may require

additional or less time compared to the previous



period.

b. Consider changes occurring at the client, such

as changes in volume, processes, product mix, or

personnel, which may require additional or less

time compared to the previous period.

c. Consider whether staff with specific expertise is

needed for, or will enhance the effectiveness or

efficiency of, the engagement.

New Schedule meeting with engagement staff to

prepare for the engagement.


New Previous step 1 modified with new substeps as

follows:

Instruct staff adequately about the engagement

and:

a. Remind or inform staff of the nature of the

client’s business and the content of the client’s

financial statements.

b. Discuss items on the financial statements that

may require particular attention as a result of:

i. Their significance to users.

ii. Their proneness to error or misstatement.

iii. Their potential to be affected by client bias.

c. Inform staff of developments, such as changes

at the client, which may affect the engagement.

d. Discuss engagement budget and:

i. Emphasize importance of early communication

when matters may affect the budget.

ii. Emphasize importance of “getting it right” by

making certain not to ignore items that may seem

incorrect, inappropriate, or otherwise attention

worthy.


New Added tailoring for the steps that need to be

performed only when not using one of the

provided illustrative example engagement letters.

Procedure steps N N/A Publish this workpaper before update so that you can

reference data that you have selected to keep. Review

and answer the new applicable questions in CMP-100 to

determine what is applicable for this workpaper.

New Added "Management’s acknowledgement that the

financial statements are not to be used by a third

party and are for management use only (Note:

This item is applicable only if the engagement is

for the compilation of financial statements that are

restricted for management use only)." to the list of

matters to be included in the understanding with

the client.

Procedure steps N N/A Publish this workpaper before update so that you can





Modify "Acquire" changed to "acquire or update.” Procedure steps N N/A

New Obtain or update the understanding of specialized

accounting principles and practices of the CIRA

industry by:

a. Reviewing relevant AICPA Accounting/Audit

Guides.

b. Reviewing financial statements of other CIRAs.

c. Consulting with other individuals familiar with

accounting practices in the specialized industry.

d. Reading periodicals, textbooks, and other

publications.

e. Performing other procedures (describe below).


New Obtain or update the understanding of the CIRA

and its industry, including:

a. Industry, regulatory, and other external factors;

b. Nature of the CIRA;

c. Objectives and strategies; and

d. Measurement and review of the CIRA’s

financial performance.

Procedure

steps

No N/A

Modify Describe the nature of the client's business

transactions or financial activities.


Modify Step Modified as follows:

Describe the client’s accounting records,

including:

a. The use of a general journal.

b. The use of specialized journals

c. The use of control accounts and subsidiary

ledgers.

d. The use of a general ledger.

e. The use of manual, mechanical, or

computerized accounting systems.

f. Other forms and methods used to record,

process, and summarize transactions (describe

below).


Modify The following was added to step to document the

stated qualifications of new accounting personnel

(include employee name, position with firm, and

description of qualifications "and changes to the

qualifications of returning accounting personnel,

including:

a. Educational background.

b. Training programs.

c. Work experience.



d. Other qualifications.

Modify Items added to the consideration of whether

professional services are needed to complete the

engagement:

a. Preparing a working trial balance.

b. Preparing adjusting entries.

c. Consulting on matters fundamental to the

preparation of acceptable financial statements.

d. Preparing tax returns.

e. Providing bookkeeping or data processing

services that do not include generating financial

statements.

f. Processing financial data for clients of another

accounting firm.

g. Other services considered necessary before a

compilation can be performed (describe below).


Delete Design and document procedures relevant to the

compilation.


New Consider whether the firm is independent. If it is

not independent, modify the engagement letter to

indicate that fact and its impact on the compilation

report.


New Consider and address the CIRA’s significant risks

and uncertainties.


Modify Reference to financial statements changed to

"financial statements or financial information."


Modify Read the financial statements step changed to

"read the financial statements or financial

information, including any required

supplementary information."


New “Are free from mathematical or clerical errors”

added to step to read the financial statements or

financial information, including any required

supplementary information.


New If this engagement is for the compilation of

financial statements that are restricted for

management use only, include a legend on each

page of the financial statements and

supplementary data indicating the restricted nature

of the presentation.

Procedure steps N N/A Review and answer the new applicable questions in

CMP-100 to determine what is applicable for this

workpaper.

New If any information or evidence obtained is

incorrect, incomplete, or otherwise unsatisfactory,



or information regarding fraud or an illegal act

that may have occurred is discovered:

a. Request that management consider the effect of

the matter on the financial statements and related

notes, including any required supplementary

information;

b. Consider the effect of the matter on the

compilation report; and

c. In the case of information, including any

required supplementary information, that is


consider obtaining additional or corrected

information.

Modify “Obtain a management representation letter"

changed to "Consider obtaining a management

representation letter.”


New The following added to step to consider whether

additional or revised information should be

obtained based on information gathered including:

a. Information collected using other compilation

procedures; and

b. Information that otherwise has come to our

attention.


New Describe other procedures used to resolve

questions raised during the compilation

engagement (describe below).


New Determine that all required forms and checklists

have been completed.


Modify "and that review notes and "to do" lists

have been removed."


CMP-201 Pre-Compilation Program: Procedures Performed Prior to a Compilation Engagement

New The accountant should evaluate the required

procedures to determine if they may impair

independence.

Instructions N N/A

New Practice point added re: making sure the client has

reviewed proposed adjusting entries.

Practice Points N N/A

CMP-202 Compilation Program: Additional Procedures for Initial Year of Engagement

Modify Replaced "not related to accepting the compilation

engagement" with "in addition to that related to

accepting the compilation engagement."



CMP-801 Compilation Program: Compilation Performance Procedures

Delete Deleted previous CMP-801 and integrated it with

CMP-101.

N N/A This version of the workpaper is "obsolete". You must

manually transfer data from the obsolete workpaper to

the steps in CMP-101, where applicable. This workpaper

is no longer functional. No data flows in or out.

CMP-802 Compilation Program: Management-Use-Only Engagement

Delete Deleted previous CMP-802 and integrated it with

CMP-101.



the steps in CMP-101, where applicable. This workpaper


CMP-801 Compilation Program: Significant Risks and Uncertainties

Modify CMP-803 renumbered to CMP-801. N N/A

CMP-901 Compilation Program: Report Preparation Publish this workpaper before update so that you can




New Added the following note:

(Note: These procedures may be followed if the

practitioner is not using one of the reports

provided in the KBCR toolset.)

Instructions N N/A

New Added the following note:

(Note: The accountant may—but is not required

to—disclose the reasons for the lack of

independence, in which case all factors impairing

independence must be disclosed.

Instructions N N/A

New New section added for reporting when required

supplementary information accompanies compiled


Procedure steps Y AR 9080 Review and answer the new applicable questions in

CMP-100 to determine what is applicable for this

workpaper.

New Does the report include a separate paragraph,

presented after the paragraph describing the

accountant’s responsibility, that refers to the

required supplementary information and explains

the circumstances regarding its presentation, and:

a. If the required supplementary information is

included and was not compiled by the accountant,

Procedure steps Y AR 9080


does the separate paragraph indicate that the

information was not audited, reviewed, or

compiled and that the accountant does not express

an opinion or provide any assurance on it?

b. If the required supplementary information is

included and was compiled by the accountant and

no material departures from the prescribed

guidelines were identified, does the separate

paragraph indicate that the information has been

compiled without audit or review and that the

accountant does not express an opinion or provide

any assurance on it?

c. If all the required supplementary information

was omitted, does the separate paragraph so

indicate?

New If some of the required supplementary information

is omitted and some is presented in accordance

with the prescribed guidelines:

a. Does the report include a separate paragraph,

presented after the paragraph describing the

accountant’s responsibility, referring to the

required supplementary information that has been

included and indicating that the information was

not audited, reviewed, or compiled, and that the

accountant does not express an opinion or provide

any assurance on it?

b. Does the report include an additional paragraph,

immediately following the one in item a. above,

that indicates that management has omitted certain

required supplementary information that is

considered an essential part of financial reporting

by the designated accounting standard setter?


New If material departures from prescribed guidelines

were identified while compiling the required

supplementary information, does the report

include a separate paragraph, presented after the

paragraph describing the accountant’s

responsibility, that indicates that the information

has been compiled without audit or review, and:

a. Stating that the accountant does not express an

opinion or provide any assurance on it?

b. Describing the material departures from the

prescribed guidelines that the accountant did

identify?



Review Programs (REVs) To enhance usability and increase efficiency, REV-101 and REV-801 were combined to create a single comprehensive REV-101 Overall Review Program and the

previous REV-801 was deleted from the toolset

Specific Review Program Enhancements

Type of

Change


Standard

Y/N

Standard

Reference


REV-101 Overall Review Program

New Contact the client to determine when information

and client personnel will be available so that staff

can begin review procedures.


New Review prior year’s financial statements,

workpapers, budget, and budget/actual

comparisons to evaluate the time necessary to

complete engagement, and:

a. Identify any specific known matters, affecting

the current or the prior period, that may require

additional or less time compared to the previous

period.

b. Consider changes occurring at the client, such

as changes in volume, processes, product mix, or

personnel, which may require additional or less

time compared to the previous period.

c. Consider whether staff with specific expertise is

needed for, or will enhance the effectiveness or

efficiency of, the engagement.


New Schedule meeting with engagement staff to

prepare for engagement.

New Instruct staff adequately about the engagement,

and:

a. Remind or inform staff of the nature of the

client’s business and the content of the client’s


b. Discuss items on the previous year’s financial

statements that may require particular attention as

a result of:

i. Their significance to users.

ii. Their proneness to error or misstatement.

iii. Their potential to be affected by client bias.


c. Inform staff of developments, such as changes

at the client, which may affect the engagement.

d. Discuss engagement budget, and:

i. Emphasize importance of early communication

when matters may affect the budget.

ii. Emphasize importance of “getting it right” by

making certain not to ignore items that may seem

incorrect, inappropriate, or otherwise attention

worthy.

Modify Step Modified to read as follows:

Perform pre-review procedures "if the client's

financial statements have not been compiled."

Review and answer the new applicable questions in

REV-100 to determine what is applicable for this

workpaper.

New Added note indicating that certain steps need to be

performed only when not using one of the

provided illustrative example engagement letters.

Publish this workpaper before update so that you can


and answer the new applicable questions in REV-100 to


New Develop or update an understanding of the client’s

organization, including:

a. The form of business organization.

b. The history of the client.

c. The principals involved in the organizational

chart or similar analysis.

d. Other relevant matters (describe below).

Modify Acquire" changed to "acquire or update."

New Acquire or update the understanding of specialized

accounting principles and practices of the CIRA

industry by:

a. Reviewing relevant AICPA Accounting/Audit

Guides.

b. Reviewing financial statements of other CIRAs.

c. Consulting with other individuals familiar with

accounting practices in the specialized industry.

d. Reading periodicals, textbooks, and other

publications.

e. Performing other procedures (describe below).

New Obtain or update the understanding of the CIRA

and the CIRA industry, including:

a. Industry, regulatory, and other external factors;

b. Nature of the CIRA;

c. Objectives and strategies; and

d. Measurement and review of the CIRA’s


financial performance.

New Develop or update an understanding of the client’s

operating characteristics, including:

a. The area the CIRA controls.

b. The size of the CIRA (such as number of units,

shares, or weeks).

c. Location and types of common properties.

d. Policies and methods for funding current

operations.

e. Policies and methods for funding major repairs

and replacements.

d. Other operating characteristics (describe

below).

New Describe the client’s accounting records (describe

below), including:

a. The use of a general journal.

b. The use of specialized journals.

c. The use of control accounts and subsidiary

ledgers.

d. The use of a general ledger.

e. The use of manual, mechanical, or

computerized accounting systems.

f. Other forms and methods used to record,

process, and summarize transactions (describe

below).

Modify Step modified as follows:

Document the stated qualifications of any new

accounting personnel (include employee name,

position with firm, and description of

qualifications),or changes to the qualifications of

returning accounting personnel, including:

a. Educational background.

b. Training programs.

c. Work experience.

d. Other qualifications.

New Added to step to perform analytical procedures to

identify unusual or unexpected relationships:

a. Comparing current financial statements with

comparable prior period(s).

b. Comparing current financial statement

information with anticipated results.

c. Studying financial statement elements and

expected relationships.


d. Performing other analytical procedures

(describe below).

New If there were changes in the application of

accounting principles, determine whether:

a. The change in accounting principle included the

adoption of another acceptable accounting

principle.

b. The change was properly justified.

c. The effects of the change presented in the

financial statements, including adequate

disclosure, were presented in a manner consistent

with FASB Accounting Standards CodificationTM

(ASC) 250, Accounting Changes and Error

Corrections.

Modify Added considerations to step to consider whether

other professional services are needed including:

a. Preparing a working trial balance.

b. Preparing adjusting journal entries.

c. Consulting on matters fundamental to the

preparation of acceptable financial statements.

d. Preparing tax returns.

e. Providing bookkeeping or data processing

services that do not include generating financial

statements.

f. Other services considered necessary before a

review can be performed (describe below).

New If applicable, perform procedures related to

recording and disclosure of significant risks and

uncertainties.

New Document other procedures used to resolve

questions raised during the review engagement

(describe below).

New Determine that all required forms and checklists

have been completed.

New Determine that all questions, exceptions, or notes,

if any, posted during the engagement have been

followed up and resolved, and review notes and

“to do” lists have been removed from the

workpapers.

New Determine whether, as a result of performing the

procedures listed above, the accountant’s client

acceptance decision should be reevaluated.

New If applicable, obtain reports from other

accountant(s).


New Consider whether other review procedures should

be performed on the basis of the results of

performing the minimum review procedures.

Modify Modified step to read as follows:

Read the financial statements, including any

required supplementary information, to determine

whether they appear to conform to the applicable

financial reporting framework—that is:

a. Whether it appears that the client has applied

accounting principles used by the industry in

preparing its financial statements.

b. Whether it appears that the client’s business

transactions are consistent with industry

transactions.

c. Whether unique industry accounting principles

are adequately described in the summary of

significant accounting policies.

d. Whether it appears that the client has applied

other accounting principles properly in preparing

the financial statements.

e. If accounting principles were not applied on a

consistent basis, whether the financial statements

appear to reflect the appropriate disclosures and

adjustments.

f. Whether the client’s accounts on the financial

statements appear consistent with the client’s

operating characteristics.

g. Whether the accounting procedures for

recording, classifying, and summarizing

transactions appear to provide a basis for the

actual accounts and disclosures contained in the


h. Whether changes in the client’s business

activities had an effect on the accounting system,

and whether it appears that the resulting change in

transactions and accounts have been properly

reflected in the financial statements.

i. Whether the financial statements appear to

properly reflect actions taken by the board of

directors, other committees, and unit owners.

j. Whether the financial statements appear to

properly reflect events and transactions that

occurred after the end of the accounting period but

before the completion of the review engagement.


New Determine that financial statements are

appropriate in form—that is:

a. Whether headings on the financial statements

are appropriate to the financial reporting

framework used to prepare the financial

statements.

b. Whether major sections of the financial

statements are properly captioned.

c. Whether accounts are grouped under

appropriate captions.

d. On the basis of titles of transactions, whether

such transactions are properly classified.


New Determine that financial statements are free from

material errors—that is:

a. Whether there are mathematical errors in the

financial statements (such as the total for assets

foots).

b. Whether there are clerical mistakes in the

financial statements (such as typographical errors).

c. Whether there are mistakes in the application of

accounting principles (such as the reporting of

property and equipment at cost with no allowance

for depreciation to date).

d. Whether the financial statement disclosures are

omitted (such as the CIRA's policy for funding for

future major repairs and replacements).


New If any information or evidence obtained is


or information regarding fraud or an illegal act

that may have occurred is discovered:

a. Request that management consider the effect of

the matter on the financial statements and related

notes, including any required supplementary

information; and

b. Consider the effect of the matter on the review

report.


REV-201 Pre-Review Program: Procedures Performed Prior to a Review Engagement

New The accountant should evaluate the procedures

required to determine if they may impair

independence.

Instructions N N/A

New In order to make certain that independence is not

impaired, the accountant should ascertain that the

client has reviewed all proposed adjusting entries

Practice Point N N/A


and understands the nature of each entry and its

impacts on the financial statements.

REV-202 Review Program: Additional Procedures for Initial Year of Engagement

Modify Replaced "not related to accepting the review

engagement" with "in addition to that related to

accepting the review engagement."


REV-801 Review Program: Review Performance Procedures

Delete Deleted previous REV-801 and integrated it with

REV-101.



the steps in REV-101, where applicable. This workpaper


REV-801 Review Program: Client Inquiries

Modify REV-802 renumbered to REV-801. N N/A

Modify Instructions for responding with "yes" or "N/A"

modified.

Instructions N N/A

Modify Table changed to require source only when

different from the primary source.

Table - other

than procedures

N N/A

Delete "and has there been any significant impairment in

the value of them? If so has any impairment loss

been properly reflected in the financial

statements?"


New Has there been any significant impairment in the

value of goodwill or other intangibles with an

indefinite useful life?


New Has any impairment loss been properly reflected

in the financial statements?


REV-802 Review Program: Significant Risks and Uncertainties

Modify REV-803 renumbered to REV-802. N N/A

REV-901 Review Program: Report Preparation

Publish this workpaper before update so that you can


and answer the new applicable questions in REV-100 to


New Note added "These procedures may be followed if

the practitioner is not using one of the reports

provided in the KBCR toolset."

Instructions N N/A


New New section on Reporting on Supplementary

Information Concerning Future Major Repairs and

Replacements Required by FASB Accounting

Standards CodificationTM (ASC 972), Common

Interest Realty Associations.

Table - other

than procedures

N N/A Review and answer the new applicable questions in

REV-100 to determine what is applicable for this

workpaper.

Modify Language on required supplementary information

modified to read:

Does the report include a separate paragraph,

presented after the paragraph reporting the results

of the engagement, that refers to the required

supplementary information and explains the

circumstances regarding its presentation, and:

a. If all the required supplementary information

was included, does the separate paragraph indicate

that the information was not audited, reviewed, or

compiled and that the accountant does not express

an opinion or provide any assurance on it?

b. If all the required supplementary information

was omitted, does the separate paragraph so

indicate and state that the results of the review of

the basic financial statements are not affected by

the omission?


Modify Language on required supplementary information

modified to read:

If some of the required supplementary information

is omitted and some is presented in accordance

with the prescribed guidelines:

a. Does the report include a separate paragraph,

presented after the paragraph reporting the results

of the engagement, that refers to the required

supplementary information that has been included

and indicate that the information was not audited,

reviewed, or compiled and that the accountant

does not express an opinion or provide any

assurance on it?

b. Does the report include an additional paragraph,

immediately following the one in item a. above,

that indicates that (1) management has omitted

certain required supplementary information that is

considered an essential part of financial reporting

by the designated accounting standard setter, and

(2) the results of the review of the basic financial

statements are not affected by the omission?



Knowledge-Based Compilation Documents (KBCs)

Specific KBC Enhancements:

Type of

Change


Standard

Y/N

Standard

Reference


KBC-201 Compilation: Client/Engagement Acceptance and Continuance Form

New Added to Section III Instructions: "These

procedures are appropriate for assessing a

continuance decision, even when there have been

no changes in the client’s personnel, management,

or governance since the preceding year. Changes

in circumstances or new knowledge may affect

perceptions of integrity, risk, or the potential for

conflict of interest. When, upon evaluation, the

conclusion is that there has been no change since

the previous period, such should be noted in the

Workpaper Reference/Comments column."

Instructions N N/A

Modify Added "Such issues may include, for example, a

change in the users of the financial statements."


New The engagement partner assigned to this

engagement has the appropriate competence,

capabilities, and authority, and the related

responsibilities have been clearly defined and

communicated to the engagement partner.

Procedure steps Y SQCS-8

Modify Section V conclusions: added "or continuance." Table - other

than Procedure

steps

N N/A

Knowledge-Based Review Documents (KBRs)

Specific KBR Enhancements:

Type of

Change


Standard

Y/N

Standard

Reference



KBR-101 Information for Analytical Procedures

New Created new tables with column of items to be

considered in accumulating information useful in

performing analytical procedures and column for

workpaper reference.

Table - other

than Procedure

steps

N N/A

New New table: Financial statement element (identify

item subject to development of expectations; e.g.,

because of its relationship to another item on the

financial statements or other factors including

economic factors such as industry averages,

interest rates, or number of employees):

Table - other

than Procedure

steps

N N/A

New New table: Independent variables (describe other

items on the financial statements with which the

designated item has a predictable relationship or

other factors that affect the designated item, such

as the applicable industry average, applicable

interest rate, or number of employees):

Table - other

than Procedure

steps

N N/A

New New Table: Relationship (describe the relationship

between the designated element and the other

items on the financial statements or other factors,

such as the estimated average salary expense per

employee):

Table - other

than Procedure

steps

N N/A

New New Table: Change (describe change or changes

in the independent variable, such as the increase or

decrease in the number of employees):

Table - other

than Procedure

steps

N N/A

New New table: Comments: Table - other

than Procedure

steps

N N/A

KBR-201 Review: Client/Engagement Acceptance and Continuance Form

New Added to Section III Instructions: "These

procedures are appropriate for assessing a

continuance decision, even when there have been

no changes in the client’s personnel, management,

or governance since the preceding year. Changes

in circumstances or new knowledge may affect

perceptions of integrity, risk, or the potential for

conflict of interest. When, upon evaluation, the

conclusion is that there has been no change since

the previous period, such should be noted in the

Workpaper Reference/Comments column."

Instructions N N/A

Modify Added "Such issues may include, for example, a

change in the users of the financial statements."



New The engagement partner assigned to this

engagement has the appropriate competence,

capabilities, and authority, and the related

responsibilities have been clearly defined and

communicated to the engagement partner.

Procedure steps Y SQCS-8

New Consideration of "or continuance" added to

Section V conclusions.


KBR-202 Review: Additional Considerations for Reviews of Interim Financial Information (For Periods

Beginning on or before December 15, 2011)

New New KBR designed as a guide for determining

whether a review of interim financial information

should be conducted in accordance with SSARSs

or with AU-C 930 for periods beginning on or

before December 15, 2011.

Y SSARS-20

AU-C 930

KBR-202A Review: Additional Considerations for Reviews of Interim Financial Information (For Periods

Beginning after December 15, 2011)

Modify New KBR designed as a guide for determining



or with AU-C 930 for periods beginning on or

before December 15, 2011.

Y SSARS-20

AU-C 930

KBR-901A Review: Acceptance of Engagement to Review Interim Financial Information (For Periods

Beginning after December 15, 2011)

Modify New KBR designed as a guide for determining



or with AU-C 930 for periods beginning after

December 15, 2011.

Y SSARS-20

AU-C 930

Knowledge-Based Compilation and Review Documents (KBCRs)

Type of

Change


Standard

Y/N

Standard

Reference


KBCR-201 Compilation and Review Program: Change in the Level of Service

Modify Step modified to read as follows:

Describe the basis for requesting a change in the

level of service:



a. A change in the needs of users (describe).

b. A change due to cost considerations (describe).

c. A change due to the unavailability of

information or another scope limitation (describe).

d. A change for some other reason (describe).

Reports (RPTs): The compilation and review reports in the 2012 Knowledge-Based™ Audits, Audits, Compilations, and Reviews of Common Interest Realty Associations have been

renumbered and also updated to conform to examples and illustrations in AR Section 9080, Compilation of Financial Statements: Accounting and Review Services

Interpretations of Section 80; AR Section 9090, Compilation of Financial Statements: Accounting and Review Services Interpretations of Section 90; and the March, 1,

2012 edition of the AICPA Audit Guide, Compilation and Review Engagements.

“Independent” has been added to the title of 18 compilation reports as discussed in AR Section 80 (it should be noted that this is optional).

NEW RPT 1022A Compilation Report: Engagement Includes Required Supplementary Information That Is Not Compiled through RPT-1022D Compilation

Report: Engagement Includes Required Supplementary Information That Is Compiled—Material Departures Identified provide sample compilation reports when

the engagement includes required supplementary information accompanying compiled financial statements.

NEW RPT-1023 Compilation Report: Engagement Includes Supplementary Information Compiled by the Accountant provides a sample compilation report when

the engagement includes supplementary information that is compiled by the accountant.

NEW RPT-1027 Compilation Report: Specified Elements, Accounts, or Items of a Financial Statement provides a sample compilation report when the engagement

is to compile specified elements, accounts, or items of a financial statement.

NEW RPT-1036 Compilation Report: Cash-Basis Financial Statements provides a sample compilation report on the compilation of financial statements prepared on

the cash-basis.

NEW RPT 1037 Compilation Report: Income-Tax-Basis Financial Statements provides a sample compilation report on the compilation of financial statements

prepared on the income-tax basis.

NEW RPT-1050 Review Report: Disclosures Omitted and Dollar Values Related to Omitted Disclosures Have Been Determined provides a sample review report

on review of financial statements when disclosures have been omitted and the dollar values related to the omitted disclosures have been determined.

NEW RPTs 1056A Review Report: Required Supplementary Information Was Not Reviewed by the Accountant to RPT-1056C Review Report: Some Required

Supplementary Information Was Omitted provide sample review reports when the engagement includes required supplementary information accompanying reviewed


NEW RPT-1066 Review Report: Cash-Basis Financial Statements provides a sample review report on the review of financial statements prepared on the cash-basis.

NEW RPT-1067 Review Report: Income-Tax-Basis Financial Statements provides a sample review report on the review of financial statements prepared on the

income-tax basis.

Correspondence Documents (CORs) The compilation and review correspondence documents in the 2012 Knowledge-Based™ Audits, Compilations, and Reviews of Common Interest Realty

Associations have been renumbered.

New paragraph added to the sample engagement letters, COR-218 Engagement Letter: Compilation (formerly COR-212) and COR-221 Engagement Letter: Review

(formerly COR 215): “We will not determine whether the reserve balances are adequate to meet future repair and replacement costs because such a determination is

outside the scope of the engagement.”

New COR-228 Communication with Predecessor Accountant Prior to Client/Engagement Acceptance provides a sample letter to predecessor accountant to assist in

making a decision prior to accepting a compilation or review engagement.

New COR-229 Request from Client to Predecessor Accountant to Release Information to Successor Accountant provides a sample letter from client to predecessor

giving predecessor permission to communicate with successor.


New representation added to COR-909 Management Representation Letter: Review Engagement: “The board of directors has reviewed the association’s insurance

coverage for the current year and believes it is adequate.”

Practice Aids (AIDs) New AID-903 Changes to Engagement Documentation after the Assembly of the Engagement File designed to document changes to compilation and review

engagement documentation after the assembly of the engagement file.

AID-201 Nonattest Services Independence Checklist updated for new tailoring at the section headers. Mark them as not applicable and all steps below will be hidden.

Resource Documents (RESs) RES-019 Knowledge-Based Compilation and Review Methodology Overview (formerly RES-005), updated for new guidance and to better communicate the KBCR

methodology.

RES-021 Index of Engagement Programs, Forms, and Other Practice Aids—Compilation and Review Engagements (formerly RES-007) updated for the new

reports that were added to the toolset, the tools that were deleted from the toolset, as well as title changes.

RES-QCCR Meeting Quality Control Standards Using KBA Compilation and Review Tools updated to include the requirements of Statement on Quality Control

Standards No. 8 (SQCS-8).

RES-KCO 2012 Compilations and Reviews of Common-Interest Realty Association Overview for Knowledge Coach Users formally RES-010 has been added as a

reference document for the workpaper update information, along with list of related workpapers for the title.


RELATED AND FOUNDATIONS WORKPAPERS FOR THIS TITLE

Related workpapers are Knowledge Coach Word workpapers where information flows in or out of tables within the workpaper. Some of these related workpapers are Foundation

workpapers or associated workpapers.

Foundation Workpapers include most of the Communication Hub workpapers, which are central to the Knowledge-Based Audit Methodology used by the Knowledge Coach titles.

Form No. Form Name

Foundation

Workpaper

KBCs

KNOWLEDGE-BASED COMPILATION DOCUMENTS

KBC-101 Compilation: Significant Matters X

KBC-201 Compilation: Client/Engagement Acceptance and Continuance Form

KBRs

KNOWLEDGE-BASED REVIEW DOCUMENTS

KBR-101 Information for Analytical Procedures

KBR-102 Review: Significant Matters X

KBR-201 Review: Client/Engagement Acceptance and Continuance Form

CMPs

COMPILATION PROGRAMS

CMP-100 Tailoring Question Workpaper X

CMP-101 Overall Compilation Program X

CMP-201 Pre-Compilation Program: Procedures Performed Prior to a Compilation Engagement

CMP-202 Compilation Program: Additional Procedures for Initial Year of Engagement


Form No. Form Name

Foundation

Workpaper

CMP-801 Compilation Program: Significant Risks and Uncertainties

CMP-901 Compilation Program: Report Preparation

CMP-903 Compilation Program: Going Concern

CMP-904 Compilation Program: Reissued Report—Predecessor Accountant

REVs

REVIEW PROGRAMS

REV-100 Tailoring Question Workpaper X

REV-101 Overall Review Program X

REV-201 Pre-Review Program: Procedures Performed Prior to a Review Engagement

REV-202 Review Program: Additional Procedures for Initial Year of Engagement

REV-801 Review Program: Client Inquiries

REV-802 Review Program: Significant Risks and Uncertainties

REV-901 Review Program: Report Preparation

REV-903 Review Program: Going Concern

REV-904 Review Program: Reissued Report—Predecessor Accountant